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The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages, as well as the volume of both purchase and refinance applications.

The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases.

The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) increased 6 basis point to 4.58% since last week, while the purchase application volume declined 1% and the refinance application volume increased 5% over the same period.

Now that the Federal Reserve has actually tapered their bond purchasing by $10 billion per month it will be interesting to watch the trend for mortgage rates.

Any significant move up in lending rates has the potential to do serious damage to home purchase activity and home prices.

The following chart shows the average interest rate for 30 year and 15 year fixed rate mortgages since 2006 as well as the purchase, refinance and composite loan volumes.




Source: Reading Rates: MBA Application Survey - January 8, 2014